In financial terms, what are liquid assets?

Liquid assets are financial assets that can be quickly and easily converted into cash with little to no impact on their market price. This characteristic is vital in assessing an entity's liquidity position, which represents its ability to meet short-term obligations.

For example, cash itself is considered a liquid asset, while stocks and bonds are also classified as liquid because they can typically be sold in financial markets quickly. The key aspect of liquid assets is their ability to be turned into cash rapidly, making them an important component of financial planning and stability.

In the context provided, the other choices describe various types of investments or assets that do not possess the same quick convertibility to cash or might involve significant time or value loss during the liquidation process, focusing on the idea that not all assets have the same liquidity characteristics.